Trends Reveal Record Low Prices in Q3 Pre-Owned Business Jet and Turboprops Transactions
While the demand for pre-owned business jet and turboprop aircraft remains unchanged, record low prices are enticing value-focused buyers to act, according to Asset Insight's Q2 2017 issue of its Asset Insight Market Report (AI2 Market Report). Turboprops and small jets lead the list of aircraft in demand with this Quarterly Market Report analyzing both the value and maintenance exposure of 92 fixed-wing models and 1,881 aircraft listed for sale. Other trends the 14-page Quarterly Market Report include:
- For sale fleet Asset Quality remains "Excellent", while average Ask Price reaches yet another new record low.
- Ask versus final transaction value gap posted a marked improvement for all four aircraft groups with small jets posting the best/lowest differential at 8.0%.
- 90-Day Future Values are decreasing slower than Q2 values with large jet values expected to fall 56% slower in Q3.
- High quality assets trading have worsened the Maintenance Exposure by 1.9% over the past three months.
- Maintenance Exposure to Ask Price Ratio ("ETP Ratio") did not improve during Q2, once again increasing the anticipated marketing time for many aircraft.
"With record low ask prices and excellent maintenance quality, the pre-owned business aircraft market in Q2 2017 offers great deals for buyers that are motivated to purchase either business jets or turboprop aircraft. The available inventory, while posting a notably smaller pricing decline, signals that pricing is beginning to stabilize, while market demand for all categories of business jets and turboprops remains steady,"
said Tony Kioussis, president of Asset Insight, LLC.
Exclusively available from Asset Insight, the AI2 Market Report includes eTrendTM, a 90-day forecast for aircraft value by make and model. This tool is especially helpful to sellers who are evaluating offers on their aircraft while concurrently considering if their prospects are likely to improve.
Statistically, Asset Insight's eTrendTM forecasts are based on some of the most robust data analytics in the industry and have been thoroughly back tested to confirm a significant degree of accuracy.
Asset Insight's proprietary Asset Grading System ProcessTM (AGSP) analyzed the average maintenance condition of jet and turboprop aircraft listed for sale as of June 30, 2017, (Source: AMSTAT) to generate the AI2 Market Report.
The AGSP derives the Asset Insight Index, whose components are the Maintenance Rating, Financial Rating, and Asset Exposure Value. Dividing the Asset Exposure Value (an aircraft's accrued/embedded maintenance) by the aircraft's Ask Price derives the Asset Exposure to Ask Price Ratio (ETP Ratio) - a quantitative view of the aircraft's current marketability. The AGSP is based on proprietary algorithms that examine current age, flight hours and cycles on an aircraft's systems and major sectors - airframe, engine(s), propeller(s), APU, paint, and passenger interior - as well as the typical cost to repair or replace parts with no defined life.